Jakarta. The decarbonization efforts by mining giant Merdeka Copper Gold (MDKA) is set to help the Indonesian government unlock net zero emissions by 2060.

MDKA is currently switching from conventional energy to more environmentally friendly renewables. The company is seeking to continue these decarbonization efforts, among others, by transitioning from coal to solar cells to support MDKA’s operations and production, particularly in the Wetar copper mine managed by subsidiary BKP-BTR. In line with the Energy Ministry’s regulation, MDKA reported that all its operations had used B35 biodiesel -- a biofuel that uses a 35 percent palm oil blend -- to power its operational vehicles and heavy equipment.

All these initiatives by Merdeka Group will not only help the company be more efficient from a cost standpoint, but the transition will lead to a positive impact on energy and the environment as coal use is minimized. MDKA has set a goal for cost efficiency to maintain its margin and bring added value, while also boosting performance in the long term. 

Aside from solar power, the company is eyeing hydropower and wind power generation which are currently undergoing feasibility studies. Once finished, they will hold trial runs in its operations. This is where MDKA’s decarbonization efforts are in line with the government’s net zero emission dream.

The net-zero emission roadmap in the energy sector calls for energy efficiency, renewable power generation, and transportation electrification. These three are all key to cutting 80 percent of emissions from the energy sector, thus putting Indonesia on track toward net zero emissions. 

Cahyono Seto, the director of Bumi Suksesindo, recently talked about MDKA’s renewable energy transition. Bumi Suksesindo is MDKA’s subsidiary that operates the Tujuh Bukit mine in Banyuwangi, East Java. 

“We will use hydropower and wind power generation. Over the next five years, we will work on making this transition. We are currently undergoing a feasibility study. Bumi Suksesindo’s renewable usage rate has even reached 100 percent,” Seto recently told Investor Daily. 

Aside from Bumi Suksesindo, MDKA owns three other major mining projects: the Pani gold project, the Wetar copper mine, as well as the nickel mines and smelters owned by subsidiary Merdeka Battery Materials (MBMA). MDKA said there would be major transformations in the company’s renewable energy use over the next five years. 

ESG Rating
In November 2023, Merdeka Group earned an A grade for its environmental, social and governance (ESG) principles rating. The improvement from BBB grade to A --as released by Morgan Stanley Capital International (MSCI)-- puts MDKA as the only Indonesian mining company who is on MSCI’s A-grade diversified metals and mining list. According to Seto, this A grade is set to help MDKA secure financing. 

“It is crucial for miners to secure financing in banks who now pay attention to [our] implementation of ESG principles. This A grade shows that we are a company that has implemented ESG principles correctly,” Seto said. 

Environmental Conservation
As a mining firm, MDKA seeks to prove its commitment to environmental issues, among others, by planting mangroves. This mangrove program has been running for the past two years. 

The company planted 2,000 mangroves around its four sites. This year, the company will also plant thousands of mangroves in areas such as Banyuwangi, Wetar, and even in Jakarta, according to Seto. 

MDKA's decision to choose mangroves in its decarbonization efforts is also not without reason. Mangroves can absorb four times more carbon than other plants. This mangrove planting program also shows that the company cares for the planet amidst climate change concerns, according to Seto. 

"The law mandates us to plant mangroves. This is also MDKA's commitment to plant [mangroves] every year," Seto said.